The blaze, that started about 6.40pm, destroyed five houses and two vehicles.
However, no casualties were reported in the incident.
Villager Steven Camson said he was shocked when his wife exclaimed that their neighbours' houses were on fire.
"My wife prepared to leave the house with our important documents, but luckily, the fire did not spread to our house," he said Wednesday.
He added that fire engines appeared to have trouble getting to the area as several vehicles had to turn around and enter using another route.
Fire and Rescue Department public relations officer Senior Assistant Superintendent Mohd Affendy Ramin said a distress call was received at 6.45pm and four fire engines from the Sembulan and Penampang fire station with 30 firemen were deployed to the scene within minutes.
"The cause of the fire is still being investigated," he said when contacted.
The fire was put under control at about 10.30pm.